The regulation of cellular differentiation in development is critical for patterning and function of adult organs. In the urogenital system, abnormal regulation of mesenchyme to epithelial transition in the metanephric blastema gives rise to congenital defects in the kidney, and underlies the expansion of undifferentiated epithelial precursors in Wilms' tumors. In a screen to identify factors involved in this process, the transcriptional co-factor CITED1/MSGI, was identified in freshly isolated rat blastemal mesenchymes, shown to be down-regulated following differentiation into epithelia, and to have a striking blastemal distribution in the developing kidney and in Wilms' tumors. We have shown that over-expression of CITED 1 blocks epithelial morphogenesis in cultured metanephric mesenchymes, and that CITED 1 is a bifunctional transcriptional regulator that represses Wnt-, and activates TGF-beta and Bone Morphogenetic Protein 7 (BMP7)-dependent responses. Suppression of Wnt-signaling is associated with an interaction of CITED 1 with beta-catenin, while activation of TGF-beta and BMP7-signaling involves a functional interaction between CITED 1 and Smad4. As Wnt4 and BMP7 are critical differentiation and survival signals for the mesenchyme, these findings suggest a molecular mechanism whereby down-regulation of CITED 1 in the differentiating metanephric blastema could de-repress Wnt4-mediated transcriptional responses and enable Wnt-dependent epithelial morphogenesis to take place. On this basis we hypothesize that CITED1 acts a bi-functional transcriptional switch that regulates epithelial morphogenesis in the developing kidney by repressing Wnt/beta-catenin- and activating BMP7-Smad4-dependent transcriptional responses. We propose three specific aims to test this hypothesis: Specific Aims 1 and 2 will extend our preliminary findings, and explore the mechanisms by which CITED 1 regulates beta-catenin and Smad4-dependent transcription; Specific Aim 3 will exploit these findings to develop pathway specific CITED 1 agonists and antagonists in order to define the role and mechanism of CITED 1 in metanephric development. These studies form an integrated approach to define the functional properties of CITED 1. In so doing, they will increase our understanding of the transcriptional control mechanisms regulating differentiation of the metanephric blastema, and in the longer term provide us with the tools to develop targeting strategies to interfere with aberrant blastemal expansion associated with Wilms' tumors.